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ANDERSON COOPER, CNN HOST: Good evening again from New Orleans, five years since Katrina. We're coming to you tonight from Musicians' Village, a new complex built here in the Upper Ninth Ward to honor local musicians and others by giving them a place to live.

It's been built by volunteers from Habitat for Humanity, some of whom are here tonight, along with AmeriCorps workers and others. There are 82 homes and duplexes built here, 90 more homes under construction in the neighborhood, one of the many signs of rebuilding and rebirth in this city.

We'll show you more of it coming up tonight. We're also going to check in on the situation with those FEMA trailers and mobile homes. Who can forget them? We'll talk to a couple who actually bought their trailer from FEMA, but it's a purchase they're paying for with their health.

We tested the mobile home, found it highly contaminated with formaldehyde, something the couple says FEMA knew and pushed the purchase of anyway.

And educating the kids in New Orleans -- it was what some call the biggest experiment and the greatest chance in making this city right for generations to come. It looks like they're on the right track. We'll talk to some kids at a charter school here.

We begin tonight, as we do every night, "Keeping Them Honest."

Five years since Katrina, and it's easy to rewrite history, easy to forget the failures that turned a natural disaster into a manmade catastrophe. It's easy for politicians and pundits, reporters and relief workers to have selective recall; easy to try and forget the mistakes that were made at all levels of the response.

We owe it to those who lost their lives and had their lives forever changed to remember, and to remember accurately. I was reminded this a few weeks ago when I saw an article in "New Orleans Times-Picayune" paper.

It's about Ray Nagin, the former mayor here, the mayor during the storm. The headline reads "Nagin Hangs Out His Shingle as Crisis Consultant."

Well, it's hard to believe, but the former mayor has filed papers opening up a new business. One of the services he is offering is -- and I quote -- "disaster recovery advice and consulting." It seems a pretty good example of how, in five short years, you can rewrite history, or, in the mayor's case, stand it on its head and turn it into a selling point. Mayor Nagin failed to declare a mandatory evacuation in New Orleans until 20 hours before the storm hit and failed to organize buses or bus drivers to evacuate the tens of thousands of people that the city knew did not have access to vehicles to leave.

Unused buses sat stranded by floodwaters, as tens of thousands waited for days at the Convention Center and Superdome. There were failures at all levels of government. Louisiana's Governor Kathleen Blanco was slow in asking for it and often appeared overwhelmed.

On Wednesday, two days after the storm hit, she was recording -- recorded whispering this to an aide. Listen.

(BEGIN VIDEO CLIP)

KATHLEEN BLANCO (D), FORMER LOUISIANA GOVERNOR: We really need to call for the military. And I should have started that in the first call.

(END VIDEO CLIP)

COOPER: Thinks she should have called in the military long before.

At the federal level, the Department of Homeland Security secretary, Michael Chertoff, he claimed no one expected such a big storm.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, FORMER U.S. HOMELAND SECURITY SECRETARY: It wasn't until comparatively late, shortly before -- a day, maybe a day-and-a- half before landfall, that it became clear that this was going to be a Category 4 or 5 hurricane headed for the New Orleans area.

(END VIDEO CLIP)

COOPER: Well, as far back as three days before it hit, the National Hurricane Center was predicting a Category 4 storm. And there had been studies done of potential flooding in New Orleans.

FEMA had been gutted over the years, their budget slashed. FEMA Director Michael Brown, whose qualifications for the job were later called into serious question, at times seemed to lack critical information.

He said the city failed to inform him that thousands of people had gathered at the Convention Center. Listen to this exchange with CNN's Soledad O'Brien on Friday, four days after the storm.

(BEGIN VIDEO CLIP)

SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT: How is it possible that you're not -- that we're getting better intel than you're getting? We had a -- a crew in the air. We were showing live pictures of -- of the people outside the Convention Center. We had a National Guardsman who -- who was talking to us, who was telling us he estimated the crowd at 50,000 people. That was at 8:00 in the morning yesterday.

And, also, we've been reporting that -- that officials have been telling people to go to the Convention Center if they want any hope of relief. I -- I don't understand how -- how FEMA cannot have this information.

MICHAEL BROWN, FORMER FEDERAL EMERGENCY MANAGEMENT AGENCY DIRECTOR: Well, we're busy doing life-saving and life-rescue efforts. We rely upon the state to give us that information. And, Soledad, I learned about it listening to the news reports.

(END VIDEO CLIP)

COOPER: He learned about it he only admitted a day before from news reports.

As for President Bush, who famously said, "Brownie, you're doing a heck of a job," well, he had decimated FEMA and seemed slow to comprehend the seriousness of what was happening on the ground. You'll recall his first view of the devastation was from the window of Air Force One.

Reporters made plenty of mistakes as well, passing along reports, many of them from official sources, but nonetheless flat-out wrong, reports of chaos in the Superdome and Convention Center, or rapes and murders and other atrocities that turned out to be urban myths.

Five years later, it's easy to gloss over our failures, but it's important as ever that we not.

Keep it in mind as you listen to my conversation about mistakes. I talked to former FEMA Director Michael Brown a short time ago.

(BEGIN VIDEOTAPE)

COOPER: Michael, five years after Katrina, as you look back on it, what was the biggest mistake you made?

BROWN: I think not putting things in context.

I have gone back through those talking points about what FEMA was doing. And they were factually correct, but they weren't in context. It was like, ok, we're moving all of this stuff in. We have teams here. The rescue teams are doing this.

But we never explained to the people that it's not coming as fast as we want it to and it's not enough because of the number of people that were left behind in the aftermath of the storm.

COOPER: I did interviews with you then. Other -- you were on TV a lot. When you were saying that stuff, I mean, you said they're talking points. How does that work? Do you -- you had -- ok, we want to get the message that were -- that we're moving and things are going well? I mean, did you believe it at the time? BROWN: No. And, in fact, you know how it works. You get these talking points that are drafted by the press office that is approved by the Homeland Security press office, and they're approved by the White House. And here is the message and here are the points we want to make sure that you make with the media.

And those -- those points are -- interestingly, they're factually correct. But I think, in the midst of that storm, what you need to do, I think what -- what politicians and government people like me need to do is say, ok, here are the -- here are the factual points. Now, let me give you some context to this about what it really means and what it doesn't mean.

And I think we also need to get beyond this -- this attitude of the rah-rah speeches, you know, we're all working together as a team and -- and we're doing everything we can. You just need to lay it down and say, you know what? We're doing all of these things. But here are the problems we have and here is why the public needs to be aware of these problems.

COOPER: Had you done that, I mean, you -- you may -- you would have been probably criticized by your bosses, but you would have been -- I mean, the history would -- would view you very differently.

BROWN: Bingo. That is exactly right.

As I have said in speeches all over the world, that one of the fatal mistakes I made was not making it clear that, indeed, things aren't moving as quickly as they need to move. What I'm executing mission assignments to ask the Department of Defense to go do something, that shouldn't take three or four days. It should take three or four hours.

And you're right. Had I -- had I said that at the time, I probably would have gotten the old hook and pulled off the stage anyway, but the truth would have been out. And I think that's a fatal mistake.

COOPER: Did the White House know how bad things were? Did the Homeland Security Department know? I mean, Michael Chertoff, head of the department, he went to an avian flu convention when New Orleans was drowning.

BROWN: And here is why that's so important.

In the middle of any crisis, whether it's a natural disaster or a manmade disaster, you need to have one person in charge. And that person needs to be on the ground with the team, understanding what's going on. And the minute you try to micromanage that from inside the Beltway, it just craters everything.

And that was a huge disconnect between FEMA and Homeland Security. For example, when Tom Ridge was secretary, Secretary Ridge, having been a governor, knew to step out of the way and let things operate as they should. Secretary Chertoff, on the other hand, never having been in this kind of a situation, didn't have a clue. COOPER: And FEMA had been gutted over the years. You know, your critics say, look, you could have resigned. You oversaw -- you know, you were there when -- when it was getting gutted and eviscerated. You could have called attention to it, but you didn't.

BROWN: Well, and in fact, I did call attention to it internally.

There are the memos that have been all over the place, the March 3rd memo to Secretary Ridge and then a follow-up memo about a year later or so to Secretary Chertoff about all of the budget cuts, the moving of the grant programs, the severing of the relationship between FEMA and state and local governments.

And, indeed, I went to the White House in May of 2005 and said that it was time for me to go and that I was going to resign. And I was specifically asked by Andy Card to stay in at least through the hurricane season. Would you wait and put this off until after Labor Day? Which, unfortunately, I agreed to do.

COOPER: I've got to ask you. When -- when President Bush said the now infamous line, "Brownie, you're doing a heck of a job," what went through your mind?

BROWN: I -- if you look at that videotape closely, as I have tried to explain to people, you see me wince, because I had literally come out of a specific meeting that I had requested with the President to describe to him how bad things were, that I really needed him to help push the Cabinet to get things moving.

And that meeting was cut short. We go out. And I knew, the minute he said, that the media and everybody else would see a disconnect between what he was saying and what I was witnessing on -- witnessing on the ground.

But that's the President's style. His -- his attitude and his demeanor is always one of being a cheerleader and trying to, you know, encourage people to keep moving. It was just the wrong time and the wrong place.

COOPER: Michael Brown, I appreciate you being with us. Thanks.

BROWN: Thank you, Anderson.

(END VIDEOTAPE)

COOPER: Well, I thought it was interesting to hear Michael Brown say that he didn't believe what he was saying as he said it, that, basically, these were talking points that he was giving, but he wasn't really given -- technically, they may have been accurate, but he wasn't really giving the full picture. And he just said he didn't believe it when he said it -- pretty interesting stuff.

Let us know what you think. Join the live chat now at AC360.com. Up next: why, five years later, some families are still living in toxic FEMA mobile homes and what FEMA knew about how dangerous they were.

Also, how far we have come from -- we'll talk to General Russel Honore and historian Douglas Brinkley on New Orleans then and now.

And we'll go to break from Musicians' Village with some of them now -- Frederick Sanders on keyboards; George French on base; Smokey Johnson on tambourine; on the skins, Bob French; Andrew Behem (ph) trumpet; and Stephen Walker trombone. They are the Original Tuxedo Jazz Band.

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(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: You can see where this levee broke.

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Katrina was a major problem, but the failure of the levees turned it into a full-blown disaster, taking an estimated 1,500 lives and leaving 100,000 homeless in greater New Orleans. Studies found a history of poor construction and maintenance were to blame. So, now:

(on camera): The walls you are building out here are just fundamentally much, much stronger?

UNIDENTIFIED MALE: Oh, no doubt about it. In every way, they're much stronger and more robust.

FOREMAN (voice-over): The Army Corps of Engineers is building a massive $15 billion flood control system, including a two-mile-wide storm surge barrier across the path Katrina took, more than 200 miles of raised and reinforced levees and flood walls and new pumping stations.

Some fear it will still not be strong enough, but it will be finished, with luck, just before next year's hurricane season begins.

(END VIDEOTAPE)

COOPER: Well, in the meantime, this hurricane season, there are storms forming even as we speak, Hurricane Danielle and Tropical Storm Earl.

Images of levees falling not a picture to be proud of, certainly, nor is this, row after row of FEMA mobile homes parked in the mud, sinking because the government couldn't figure out who should get one. You remember that? Well, eventually, thousands would get one, only to learn that they gave off toxic formaldehyde fumes.

As you'll see, some families would get the help they needed to move out, but others five years later are still stuck, forced by circumstances to live in homes they say are toxic.

(voice-over): Five years ago, they were living in a FEMA trailer. Denise was a mother, just trying to keep her family sheltered and alive.

(on camera): So, now this is your bedroom?

UNIDENTIFIED MALE: Yes. I don't like sleeping in cabinets.

O'BRIEN: When you look back at that time, what do you think?

DENISE SWANSON, HURRICANE SURVIVOR: I just can't imagine how we did it.

O'BRIEN (voice-over): Today, they're in their new home, built by an army of volunteers that descended on Pearlington, Mississippi, after the storm.

TOM DALESSANDRI, COALITION OF DISASTER RELIEF AGENCIES: Of course, this was ground zero. Literally, the eye passed over Pearlington.

O'BRIEN: An estimated 6,000 volunteers came to the aid of this tiny village of fewer than 2,000.

DALESSANDRI: Total devastation.

O'BRIEN: People like Tom Dalessandri, who came from Colorado.

DALESSANDRI: It's been estimated that 85 percent of the recovery, not only here in Pearlington, but along the Gulf, has been done by volunteers.

O'BRIEN (on camera): This is your new carpet going in?

(voice-over): Today, the Swansons are already upgrading their home, thankful they got out of their FEMA trailer after two years, a trailer we found had high levels of formaldehyde and was making them sick.

(on camera): Well, how did you deal with that?

SWANSON: There wasn't much we could do. There was nowhere else to go.

O'BRIEN (voice-over): Barbara and Charlie Syre (ph) have nowhere else to go. They live about an hour away in Picayune, Mississippi, still in their FEMA mobile home.

Intended as temporary shelter, these homes were built quickly, with materials later found to have high levels of formaldehyde. In 2008 the Syres were told they could buy their FEMA mobile home. As part of the deal, FEMA tested for formaldehyde. The home failed, but then, the Syres say, FEMA told them how to pass.

CHARLIE SYRE, LIVES IN FEMA TRAILER: And they told us, when we get there, we want all the doors open, all the windows opened. We want it cooled down. We want it aired out. By airing it out and the temperature being colder would cut down on the numbers.

O'BRIEN: The lower reading meant the Syres could buy the trailer. They paid $5, a bargain they say has cost them their health.

Charlie has been battling pneumonia. Barbara has constant headaches, all symptoms, their doctors say, of formaldehyde exposure.

In a statement, FEMA said they have taken steps to ensure that all temporary housing units used in current and future disasters meet or exceed industry standards for air quality. They also said they're encouraging owners to -- quote -- "follow all industry-suggested practices for the maintenance, upkeep and ongoing air quality testing of their units."

(on camera): Inside of this is a formaldehyde vapor monitor. Where do you want to hang it?

BARBARA SYRE, LIVES IN A FEMA TRAILER: My bedroom, I guess, would be best.

O'BRIEN: All right, let's put it in there.

(voice-over): Our own testing this month found formaldehyde levels inside the Syres' home five times higher than levels FEMA found almost two years ago, well above the standards set for normal living conditions.

(on camera): What does FEMA tell you when you say, take this trailer back?

B. SYRE: We can't.

C. SYRE: It's yours.

B. SYRE: You already bought it.

O'BRIEN (voice-over): Now they're out of work, living on Social Security, and can't afford another home. And they don't qualify for any other grants or housing options.

C. SYRE: We fell through the cracks.

O'BRIEN: Did you ever think you would be in this circumstance?

B. SYRE: Never.

C. SYRE: No.

B. SYRE: I have been through every hurricane, but Katrina, it took my soul.

(END VIDEOTAPE)

COOPER: It's incredible. I mean, it's incredible. They say FEMA helped them -- or basically told them how to pass the test.

O'BRIEN: Air it out.

COOPER: Air it out.

O'BRIEN: Yes, absolutely --

COOPER: That's stunning.

O'BRIEN: -- because, you know, in order to buy the trailer, they had to have the test passed first.

They have two problems. One is, they're not on the coast. And so volunteers, in many cases like this behind you, did not show up to help them. They showed up in New Orleans. They showed up in the coastal communities.

And then, number two, because of the thousands of trailers that are still out there, some of them FEMA still provides, another 1,200, just like the Syres, that people have bought and living --

COOPER: Twelve hundred?

O'BRIEN: Roughly 1,200.

COOPER: All right.

O'BRIEN: Now, 98 percent, roughly, of the FEMA trailers, people have moved out of their FEMA trailers, are in, you know, long-term housing. So, the big picture is that, overall, it's much better.

COOPER: Right.

O'BRIEN: But there are people who have fallen through the cracks, partly because they have been ignored kind of on both ends.

COOPER: Watching them with their medical problems just sitting there in that trailer that they know has -- is toxic is incredible.

O'BRIEN: Yes, it's -- it's really sad.

COOPER: Soledad, I appreciate the reporting and "Keeping Them Honest."

O'BRIEN: You bet.

COOPER: Still ahead: New Orleans then and now. What's changed for better and for worse? We'll talk to historian Douglas Brinkley, who wrote the definitive book on the disaster, and also the general in charge of cleaning up the mess, Russel Honore.

Plus, an update on one of the people we met five years ago, a doctor who was here about to start a new job when the storm hit and was forever changed by what he saw.

Also later, my conversation with Harry Connick Jr. here in the Musicians' Village -- but, first, more from the Original Tuxedo Jazz Band.

This is a 360 special, "In Katrina's Wake: Building Up America."

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(COMMERCIAL BREAK)

COOPER: And welcome back.

We're back with a special edition of 360 here in Musicians' Village -- a lot of good folks from AmeriCorps and from Habitat for Humanity who are here to -- to help in the rebuilding of this great city.

You know, we met a lot of people five years ago in New Orleans, ordinary people who were thrust into extraordinary situations.

Dr. Greg Henderson was one of them. Take a look.

(BEGIN VIDEO CLIP)

DR. GREGORY HENDERSON, PATHOLOGIST: You need help?

UNIDENTIFIED MALE: (INAUDIBLE) I need everything.

HENDERSON: You need to get your -- you need to get out of that water.

Can we help this guy out?

I was the only doctor around. The memories of what happened, you don't remember all of it.

It would be months later, even years later, where I remembered stuff. And -- and I kind of said, well, God, did I really do that? It keeps me awake sometimes, thinking about what I couldn't do.

We felt that, with the -- the risk of -- to our children of living in the city and furthermore the chronic experience of living in a state where every conversation is about Katrina and the aftermath, I just felt like they needed and they deserved more than that.

And so we made, with -- with great, great difficulty, the decision to leave. And it was, for me, probably the -- one of the hardest decisions I have ever made in my life.

We're in Seattle now. An important factor is, we had to go to a place that had good oysters. We see ourselves as exiles. And -- and -- and New Orleans is -- is more than a city. New Orleans is -- is a state of spirit. And if you're going to be in exile, you might as well, you know, bring the spirit with you.

(END VIDEO CLIP)

COOPER: That was Dr. Greg Henderson, a pathologist who was in New Orleans to start a new job when Katrina hit. He tried to help as many people as he could. When Henderson arrived, we -- we ran into him at the convention -- after, actually, at the Convention Center days after the storm hit. He had tried to go there, trying to see what he could do. He was one of the people that we met along the way -- so many people that we met along the way.

We have a lot to cover in this hour ahead.

I'm joined now by one of the men who became a household name in the wake of Hurricane Katrina. General Russel Honore joins us now, and Doug Brinkley as well, presidential historian, also wrote one of the -- probably the definitive book about the storm and its aftermath.

Guys, come a little bit closer, if you could.

LIEUTENANT GENERAL RUSSEL HONORE (RET.), U.S. ARMY: All right.

COOPER: You were saying that one of the unsung heroes of this storm was the dragonfly. Explain that.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Well, that's right.

Right after the city started flooding, we forget one of the big concerns of the federal government and health officials was toxic waters. They were calling it the toxic soup, if you recall. And mosquitoes was a great fear. People here were saying West Nile Virus could come.

And it stopped a lot of rescue and relief work; people didn't want to go in that dirty water.

And the mosquitoes were around. And suddenly the dragonflies came. And it's just nature at work. They eat as many mosquitoes as humanly possible. And, so -- all of the waters when people were doing early rescue relief -- this is a few days after the storm -- the dragonflies were blanketing all over the water.

COOPER: I remember seeing them. I never gave them any consideration.

BRINKLEY: Yes, they're a positive thing.

And when I was thinking about writing about it, John Steinbeck, for The Dust Bowl, used to use a lot -- in "Grapes of Wrath" -- the symbol of the tortoise. And in some -- and in Mormon literature, the seagull eating the locusts is important. The dragonflies in the waters of Katrina was a symbolic biology at work.

COOPER: When you look back to five years, I mean, do you think we've learned the lessons of Katrina? Do you think, if there was a disaster now, similar size, similar scope, similar warning, we would be better prepared?

HONORE: Yes, I think Katrina turned the page for America, particularly people in this region, that evacuation, for those who can, must leave. Those who can't, the government must be here to get them out. I think that kind of played out in Gustav.

So, I think it has stuck, Anderson. But there's still parts of the country who -- who don't think a Katrina could happen to them, because those things don't happen in our town. It replays a script. And during hurricane season, everybody needs to be -- remember, you need to be prepared to evacuate.

COOPER: It was interesting. I was talking to -- to former FEMA Director Michael Brown earlier, and -- who really became, you know, the focus of a lot of -- of -- sort of the symbol of the failure, when, frankly, there were failures at all levels of this thing.

It was interesting, though. I found it interesting for him to say that he didn't believe some of the stuff he was saying it as he was saying it. I don't know if you heard that interview.

BRINKLEY: I thought it was very interesting. And, also, he's throwing Michael Chertoff under the bus here on the fifth anniversary, Michael Brown. There was a feud.

Michael Chertoff at Homeland Security was part of that putting FEMA, ghettoizing FEMA and Homeland Security. The Bush administration thought of FEMA as a feel-good, Jimmy Carter, liberal organization. They put Michael Brown the head of it. He wasn't ready for that job. He used to be the head of a horse association -- an Arabian horse association.

And they got what they paid for in Michael Brown. He did not do a good job. But Michael Chertoff was worse. He was AWOL. He never told the President that 80 percent of this city was flooded. And, as you mentioned, he went on to Atlanta to an avian flu conference. He should have been fired, Michael Chertoff.

Instead, Karl Rove and Chertoff and the Bush crowd first wanted to blame Blanco and then blame Michael Brown once "Time" magazine saw there were some discrepancies in Brown's resume.

COOPER: I still get questions -- and you must get this question all the time -- and I know, because I read your book, you address it -- you know, and people say, well, look, reporters can get there in a day or two. How come it took five days for buses to get to the Convention Center?

HONORE: Absolutely.

A lot of the infrastructure, Anderson, as you know -- the preferred way would be to use the airports. They were -- they were down. The Nav-aid systems were out. Some of the roads were out. And, oh, by the way, we had to get buses from other states. The local buses themselves were affected or they were already being used.

So, getting buses here to move, when you say we need buses for 40,000 people, that's a big order. FEMA don't own buses. And oh, by the way, thank God, because of Katrina, things have changed. FEMA now pushed buses to the region before the storm came. Pre-Katrina, FEMA was a pull organization. You had to pull them in through a request. Now, because of Katrina, actions in the Congress, they now pre-positioned bus and, by the way, the state of Louisiana has a standard contract to get buses here before the storm arrives.

COOPER: When you see the city now, five years later, what do you see? What's good, what's bad?

HONORE: I see the good, the great and the ugly. A lot of good things happened, you know, on the cusp of being great, like the school system, some of the infrastructure, the business district, the French Quarter. New Orleans is open for business. People are coming, having a great time.

And then there's the ugly, the rest of the story in places like the Ninth, Seventh Ward, St. Bernard Parish, where people didn't get a fair break on the Road Home program.

The good news is it doesn't have to stay that way. And hopefully, this weekend the President will bring a message that we're going to fix that, because people didn't get a fair shake. If you were poor, it was harder for you to get back into your house. They used different scales for what the cost of a house would be to replace: one price in the Ninth Ward, one price on Magazine street. That's got to be fixed.

COOPER: I talked to a woman in the Upper Ninth last night, she was talking about a contractor running off with her money.

HONORE: Absolutely.

COOPER: And she has no recourse.

So as you see it now, what's -- five years on -- I mean history changes, and I feel like it's easy to rewrite history, and I think it's a real problem that you have politicians now basically trying to rewrite what really happened here. What do you see the big picture as this -- what is this the story of?

BRINKLEY: That's why it's important to do what you're doing and why we're looking at the fifth. Let's remember what really happened and not let revisionist history come in here.

It was a break down at all levels of government. There are some good things happening right now. We were talking about FEMA became a dirty word. If you pick up the "Times-Picayune" tonight, you'll see FEMA is giving $1.8 billion to the schools here.

COOPER: Right.

BRINKLEY: Senator Landrieu was fighting for it. There's positive things happening, but we're still living in Katrina.

I mentioned the Dust Bowl earlier. The Dust Bowl wasn't a year. It was a big part of a decade. And people here, right around -- we just go two blocks from here, you can feel the devastation of Katrina all over the city.

It was a region that was just struck and hampered, and we haven't addressed the wetlands disappearing and we haven't really fixed the levees to make it safe like those magical Dutch levees we were going to build. They're not here. This city is still not safe for a Category 3, 4, 5 storm.

COOPER: The most -- one of the most remarkable things I think we'd all agree is the number of -- and I'm not just playing to the crowd here -- the number of volunteers, whether it's AmeriCorps or Habitat for Humanity or church groups or any number of organizations which have just continued to come here season after season after season, long after, you know, the reporters have left.

HONORE: I'm convinced the volunteers did things that government isn't good enough at doing. They came in and showed compassion. They got things done. They made a difference in people's lives.

And, as you say, they continue to come. That is the strength of America. It's the strength that really has helped this city come back a lot quicker than any government program.

We're going to show you some of the work the volunteers here at the Musicians' Village, coming up.

Also ahead on this 360 special, New Orleans schools five years after Katrina. The General talked about it a little bit. Once notoriously bad, the city's new classrooms are being called a model of learning by some experts.

For the kids in New Orleans, it's a new beginning. Still, a lot of questions remain. We'll talk to some of those kids though.

And later Harry Connick Jr. joins me. Many musicians were forced to flee New Orleans after Katrina. He helped make it possible for them to come back here by helping to build this village. We'll show you how it's grown.

Our AC 360 special report: "In Katrina's Wake: Building up America" continues in a moment. We'll be right back.

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COOPER: A lot more from New Orleans ahead when our special, "In Katrina's Wake: Building up America," continues. But first, let's get a "360 Bulletin" with Alina Cho -- Alina.

We just got word that former president, Jimmy Carter, is leaving North Korea with an American imprisoned there since January. The 30-year- old Boston man had been sentenced to eight years of hard labor for allegedly illegally entering the country from China.

Also tonight, dramatic video from deep underground: the 33 men trapped 2,300 feet down in a mine in Chile, apparently made a high-definition video for their families.

Each man sent a message to his loved ones. The miners also showed the space where they live, eat, exercise and sleep. Their families watched the 25-minute video in a private screening.

The FDA is calling contaminated chicken feed a likely culprit for the salmonella outbreak that sickened more than 2,400 people nationwide. The bacteria also turned up in manure samples from the two Iowa farms at the center of the outbreak.

American Airlines slapped today with the biggest fine in history. Federal aviation regulators are proposing a $24.2 million civil penalty, saying the airline put passengers in jeopardy after failing to properly inspect wire bundles in the wheel wells of its MD-80s. The lapse snarled thousands of flights back in 2008.

And guess what? Levi Johnston apparently will have to share the reality TV spotlight with his two-time fiancee, Bristol Palin. That's right. Sarah Palin's eldest daughter has joined "Dancing with the Stars" for the show's 11th season. That report coming to us, Anderson, from E! Online.

Back to you in New Orleans. Great to see you there. Hard to believe it's been five years, but great to see all those people there behind you.

COOPER: Yes, it certainly is. Alina, thanks.

Coming up next on the program, the kids after Katrina. Schools once flooded are now filled with kids who have become an inspiration for people in the city. Their story coming up.

(BEGIN VIDEO CLIP)

PAUL PRUDHOMME, CHEF: Hi, I'm Chef Paul Prudhomme. I'm here to tell you that New Orleans is back, and it's back all the way. All the things that have happened to us in the last three or four or five or six or seven years is going away. And we want you all to come and have a good time with us, with our music, especially with our food, and just good old New Orleans love for you all.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

COOPER: The original Tuxedo Jazz Band here with volunteers from AmeriCorps, Habitat for Humanity here in Musician Village. We're going to talk to Harry Connick Jr. coming up about the importance of Musician Village in the rebirth of New Orleans.

Five years after Katrina New Orleans' public schools are getting $1.8 billion from FEMA to build or renovate schools damaged by the storm. Five years later, too many school buildings are still left in ruins, but the school system itself has been transformed. And a lot of people here feel it's for the better. In fact, it's praised nationwide as a model for education.

Most of the kids are now taught in charter schools. Among them is the Thurgood Marshall U&O Early College High School. I spoke to some of the students earlier.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: As soon as the storm hit where I lived, we didn't get water, we just got a lot of us had wind damage but I had two little sisters, and we didn't know where they were because they were with my mom. And we had to find them. They were in a housing development where they had lots of water. We had to swim to get them to them and bring them back to my house where it didn't have any water.

It was scary. The water was like 13 feet. And we just had to swim from the bridge to get there and swim back while carrying them. Pretty scary.

COOPER: What was it like when you were here during the storm?

JOVAN GUSS, STUDENT: Well, it wasn't good. We had -- we stayed there for three days in our house, and then we got lifted by helicopters.

COOPER: What was that like?

GUSS: It was OK. I was scared, because they had the door open. So, it was like we were flying over all this water, felt like we could, like, fall in. And it wasn't good because they had babies next door, and they didn't have stuff to feed the baby with.

We thought it was going to pass over us. So, it wasn't like good. Like, toilets didn't flush, nothing worked. So it was horrible.

COOPER: Do you think things have gotten a lot better in New Orleans since Katrina?

GUSS: Yes.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Yes.

COOPER: How?

GUSS: Less crime.

UNIDENTIFIED MALE: School.

COOPER: School?

JAZMINE SYLVE, STUDENT: I feel that since New Orleans kind of had to start over, we have improved in a lot of different things. Now, we have charter schools, and a lot of schools are more on top of it. And, like, we had to rebuild a lot of the schools so they look better. So, in those ways.

DAVID LEBLANC, STUDENT: State of the art and also like highlights a lot of wrong things that happened like school structure. But now we have schools that offer college-level courses, and when we graduate, we'll have an associate's degree. So that's a definite plus.

COOPER: Is it a lot harder, though?

GUSS: Yes.

COOPER: It's a hard school?

GUSS: Yes. It's fun, though. It's fun and hard.

COOPER: It's fun and hard? Really? Usually, things that are hard aren't all that fun.

GUSS: But it's a challenge. That's good. I don't want it to be too easy. I want to be challenged so I can get everything I need and I know that I'm learning.

COOPER: Are you going to do anything for the fifth anniversary of Katrina? Or is it just going to be a regular day?

SYLVE: Pray about it. Thank God that we made it through and think about the people that we lost in Katrina, things like that.

COOPER: Do you want to stay in New Orleans?

SYLVE: Oh, yes.

GUSS: That's why we all came back to New Orleans. I grew up here, and I like it. It's like home. I'm comfortable here. Like, when we went away, it was a different world. I didn't know nothing but New Orleans. And I know the music. I know the food. Everything tasted different.

COOPER: Everything tasted different?

GUSS: Yes. It tasted real different.

COOPER: Does the rest of the country not taste as good?

GUSS: Everything is good, but it's just not New Orleans.

SYLVE: Different flavor.

COOPER: Just a different flavor?

GUSS: Different flavor. SYLVE: Even if one day -- I don't think it will happen -- that I will move away, I can't imagine me not coming back to visit at least more than five times a year. Like, I would have to come back some kind of way. It's going to always be home.

(END VIDEOTAPE)

COOPER: It will always be home.

The school is part of the Capital One University of New Orleans Charter School Network. Andrew Perry is his chief executive officer. He's also the associate dean of the University of New Orleans College of Education and Human Development.

COOPER: More than half the schools now in New Orleans, in public schools, go to charter schools.

PERRY: That's right.

COOPER: What's the thinking behind that?

PERRY: The thinking is you have to have greater accountability on schools. The days when one board of seven people or nine people or 11 people controlling hundreds of schools are generally over, in a sense that it's hard to really have that type of intimate relationship with students when you're working from so far up.

And so we decided, as -- as part of a practical necessity to decentralize schools, to find individual and non-profit boards to manage schools and they -- therefore, they run these charter schools. And so we have, for 70 -- 70 percent of our students now being educated within them.

COOPER: Some test scores are going up. But it's still kind of too early to tell. Is it -- well, actually, let me ask that -- is it too early to tell whether or not this is working?

PERRY: Well, ultimately it is too early. But we are seeing signs of growth. Before the storm, 30 percent of our schools passed based on statewide measure.

COOPER: Thirty percent?

PERRY: Thirty percent.

COOPER: That's incredible.

PERRY: Now we're at 60 percent. We've still got 40 percent to go. We have a long way to go --

COOPER: Right.

PERRY: -- but it's encouraging -- it's encouraging to see so many schools improving so rapidly.

COOPER: And what needs to happen now? There's been this big -- FEMA now says they're going to give more than $1 billion to help rebuild the city's schools.

PERRY: Yes, facilities is certainly one of the major factors. In fact, one of my schools, Pierre A. Capdau, has to evacuate again because the building deteriorated well beyond the expected date. So, we had to evacuate and move again.

And so, obviously, that's detrimental to the educational outcomes. But certainly, that's one factor that we have to fix.

But also -- but we're seeing growth in other areas: certainly, early college high school. It's an opportunity for kids to take college courses early.

COOPER: And that's what they're doing at the school?

PERRY: That's what they're doing. And you're seeing benefits. That -- the first guy that spoke got a 30 on his ACT.

COOPER: Otis?

PERRY: That's right, Otis. Now when you're talking about 30 on the ACT in a city like New Orleans, where we're predicting less than 50 percent of folks graduating. We won't even talk about the males, but that's incredible because that kid has options.

And that's what we're doing in New Orleans. It's not groundbreaking in a sense. We're not doing all this reform that's so different, in a sense. Charter schools are just doing what we always should have done in the past. But we're giving kids an opportunity. This is what happens when you give kids an opportunity.

COOPER: It's one of the many exciting things happening.

PERRY: Oh, absolutely.

COOPER: It really is. I appreciate you being with us.

PERRY: No problem. Yes, yes, yes.

COOPER: Thanks so much. Good luck to you. Thanks for all your hard work.

PERRY: Thanks.

COOPER: Incredible, Andrew Perry.

Still ahead, my conversation with Harry Connick Jr. and Ellis Marsalis about their passion for this city and the village they've helped build for musicians who call it home. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

THE EDGE, MUSICIAN: This is The Edge from U2 and I'm here in Helsinki in Finland, and I just want to say a big thank you to New Orleans.

None of this would have been possible without the contribution that New Orleans has made to the birth of rock 'n' roll. There would be no rock 'n' roll. So I just want to say we are -- our hearts and minds and thoughts and prayers are with New Orleans as you come back from the tragedy that is Katrina. And we hope that you come back stronger and stronger because we rely on you for inspiration. So, thank you. Good-bye.

(END VIDEO CLIP)

COOPER: That's U2's The Edge, talking about the incredible influence that New Orleans has had on music.

As we told you earlier, we're in the Musicians' Village in the Upper Ninth Ward of New Orleans, newly designed community for artists to live and create in. Earlier, the fleur de lis was placed atop the Ellis Marsalis Center for Music here.

The center's named, of course, for the famed jazz pianist and composer. His son, Branford Marsalis, helped come up with the idea of the village, along with Harry Connick Jr., who surprised the crowd earlier today with an impromptu performance. Harry Connick Jr. and Ellis Marsalis joined me earlier.

(BEGIN VIDEOTAPE)

COOPER: So what happened here today?

HARRY CONNICK JR., MUSICIAN: This was a big day, because the Musicians' Village has been sort of in development for a few years now, but the Center for Music was sort of officially unveiled today. It's not operational yet. It still has, what, about another year to go, I guess.

ELLIS MARSALIS, COMPOSER/PIANIST: Sometime in the spring, I think.

CONNICK: OK. But it was a huge deal to -- it was the first time I've actually seen the center. And it's named after Ellis Marsalis, who's with us. And it's just -- it was pretty surreal to see it all come together.

COOPER: It must be extraordinary for you to see it opened up like this.

MARSALIS: Well, it is in some ways. But when I think about the charge for what it's about, it can get to be kind of anxious.

COOPER: How so? MARSALIS: You know, like --

CONNICK: Can I tell them what you said?

MARSALIS: Anxiety.

CONNICK: I said, "Congratulations" to him before.

He says, "It's a little too soon for that."

I said, "Why?"

He says, "We have to see what happens once the doors open." You know, because Ellis is a great educator and organizer. And I think that's why he has a reputation of turning out musicians constantly that, you know, are well prepared. But, you know, he's like the building is great, but what happens on the inside is what really matters.

COOPER: And what do you want to have happen on the inside? How do you see it?

MARSALIS: Well, I would like for it to maximize the development of young -- young performers who would fulfill whatever their personal ambitions would be.

But there's a group of kids who don't know very much about the discipline of practicing an instrument, establishing some goals, because what we are at the center is a unique kind of establishment. It's not a school and it's not really -- we hope to have some aspects of it become like a community center.

COOPER: For you, what's your vision for this village?

CONNICK: We're standing in it. I mean, to see what it's now become, you know, 80 residences, which is the Musicians' Village, and 80 percent of those residences being inhabited by musicians and their families. To go to the center, which will be a performing space. They'll have recording facilities. They even have a beating room for the Mardi Gras Indians, which is a great part of our Mardi Gras tradition.

To have it named after this guy is really -- it's huge. It's really -- we couldn't have dreamed of anything greater than that.

MARSALIS: Puts a lot of pressure on me.

COOPER: Puts a lot of pressure on you.

CONNICK: Because he takes it is seriously. I mean, he's the kind of guy who's not going to sit back and, you know, say, "This is my building." He's going to -- all I can say is, if he teaches now the way he taught me, I'm really scared for anybody who has to sit in a classroom. It's --

COOPER: You're playing Friday night. Are you going to play anything special for the fifth anniversary of Katrina? MARSALIS: I hadn't really thought about doing that.

CONNICK: You mean you haven't written a suite or something?

MARSALIS: No. Maybe I could scratch one out between now and Friday.

COOPER: It's an honor to talk to you. Thank you so much. Thanks very much.

CONNICK: It's not an honor for me?

COOPER: No.

CONNICK: That's all right. OK.

(END VIDEOTAPE)

COOPER: We want to leave you tonight with more great live music from the Original Tuxedo Jazz Band: Frederick Sanders on keyboard; Horace French on bass; Smokey Johnson, tambourine; on the skins, Bob French; Andrew Bain, trumpet; Steve Walker, trombone; and all the volunteers from AmeriCorps and Habitat for Humanity.